Dell posts 28% rise in Q1 earnings

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Dell says first-quarter earnings rose 28 per cent from a
year ago on strong international sales, and forecast higher revenue
growth in the second quarter.

Dell, the world's largest direct-sale computer vendor, said net
income grew to $US934 million ($A513.72 million)
, or 37 US cents per share, in the three
months ended April 29 from $US731 million, or 28 US cents per
share, a year ago. Revenue rose 16 per cent to $US13.39 billion
from $US11.54 billion last year, driven by international growth and
sales of strategic products and services.

The results, announced after markets closed on Thursday, were in
line with the forecast of analysts surveyed by Thomson Financial
for earnings of 37 US cents and sales of $US13.42 billion.

Dell said sales outside the US increased 21 per cent from a year
ago and grew to 42 per cent of the company's total revenue.
Worldwide revenue from storage systems increased 49 per cent and
sales of mobility products grew 22 per cent from a year ago.

Revenue in Europe was up 20 per cent, while the company's
Asia-Pacific and Japanese markets saw 20 per cent growth. That
compares to 16 per cent in the US, which chief executive officer
Kevin Rollins described as a healthy but not explosive market.

"The US had an excellent quarter, we're quite happy," he
said.

For the first time, Round Rock-based Dell broke out its revenue
into six product categories, reflecting the company's push to
expand beyond desktop PCs and corporate computer systems.

Revenue from desktops, which still account for 40 per cent of
Dell's business, fell 5 per cent from the previous quarter but
still grew 6 per cent year-over-year to $US5.3 billion.

The mobility category, which includes laptops and handheld
organisers, jumped 22 per cent from a year ago to $US3.3 billion.
The services and peripherals category, which includes printers and
televisions, accounted for $US2 billion in revenue, up 29 per cent
from the previous year.

Rollins said Dell has maintained profitability despite a
shifting tech landscape that has seen executive shake-ups at
Hewlett-Packard and the purchase of IBM's personal computing
division by Lenovo, China's top computer maker.

"It's not a market phenomenon but a winners or losers
phenomenon," said Rollins. "This environment is ideal for our model
and plays into the strength of our strategy."

Last month, he announced during the company's annual analysts
meeting that he expected Dell to become a company with annual sales
of $US80 billion in another three to four years.

The company forecast second-quarter earnings per share of 37 US
cents to 39 US cents, and predicted that revenue would rise 16 per
cent to 18 per cent to between $US13.6 billion and $US13.8
billion.

Analysts are expecting second-quarter profit of 38 US cents per
share on sales of $US13.64 billion. Second quarter earnings will be
announced on August 11.

Dell said it spent $US2 billion in the first quarter to buy back
more than 50 million shares. In the past year, the company has
reduced the number of outstanding shares by more than 80
million.